The research paper states that instead of the term “cryptocurrency,” the Financial Stability Board proposes to use the term “crypto asset,” which can be considered a financial asset based on the application of cryptography and distributed ledger technology.

According to the report, crypto assets do not pose a risk to global financial stability, because at present the volume of crypto asset transactions is very low compared to the scale of the global financial system.

The relation of this segment to the financial system is insignificant, according to the report.

The paper states that crypto assets could constitute a risk to financial stability in the case of further market growth, large-scale involvement of retail and institutional investors, banks, and other market players. According the the central bank’s report, the high price volatility of crypto assets prevents them from being a reliable standard of value, means of exchange, and store of value.

Additionally, the paper outlines several risks connected to investment in crypto assets, including the lack of protection of investor rights, risks in the field of preventing money laundering and terrorism financing, lack of market liquidity, operational risks, and the use of leverage.

Earlier this month, the Russian State Duma approved the first reading of new legislation to regulate the crypto industry. The laws define cryptocurrencies and tokens as property, and lay out specifications for interacting with crypto and blockchain-related technologies.

Last week, Russian bank Sberbank CIB and the National Settlement Depository announced a pilot of the country’s first official Initial Coin Offering (ICO).

Head of Sberbank CIB Igor Bulantsev said the bank considers the Russian ICO market to be “highly promising,” emphasizing that many of the bank’s clients “are interested in this new way of fundraising.”

Rustem Kazazi, an American citizen, was just trying to get on a plane to return to his native Albania last October, from Cleveland Hopkins International Airport. He was initially flying to Newark where he’d catch a connection to Albania.

He hoped while in Albania for a few months to do some repair work on a home he still owned there, and possibly to look for another home for his family in his old age. Given facts about the Albanian banking and finance system and the advantages of cash there, he chose to turn his life savings into U.S. dollars and bring them with him to cover expenses related to the above house needs and his long stay rather than deal with bank transfers or anything of the sort.

At an American airport, he was the victim of desperadoes who took everything he had.

Kazazi ran his carry-on luggage through the x-ray machine, like we all must. In that luggage was his life savings in cash, $58,100. There was zero attempt to be clandestine or smuggle-y about it. It was divided into three labeled and marked stacks of $100 bills, all in one envelope with $58,100 written on the outside.

TSA agents noticed the money. Hard not to, I guess. They called Customs and Border Patrol on Kazazi, who took him off to a private room to grill him, as well as strip him naked for a search for, what? money he did not label openly in his carry-on luggage?

While his English is poor and he couldn’t quite understand the agents, they refused him either an interpreter or to summon family for help.

They kept his money, without telling him why, then tried to get him to just get on his flight without it. The receipt they handed him made no reference to the specific amount they’d confiscated. When he refused initially to just go on with his day as if he hadn’t just suffered a horrible crime, they escorted him out of the airport. He contacted his wife in shock and she assured him it must all be some mistake and encouraged him to go forward with his travel plans.

In December CPB finally formally informed him via a “Notice of Seizure” that they’d taken $57,330 from him, $770 less than he insists was actually taken. The Kazazi’s filed all the officially required forms and notices to proceed with trying to get their money back before the legal deadline (after some complications involving confusing deadlines provided by CBP, and including the $770 the CPD seemed to deny it had even stolen). CPB agents tried to finagle the Kazazi’s into withdrawing their demand for federal court action, but failed.

Kazazi and his family today filed a formal motion for return of property under Rule 41(G) against U.S. Customs and Border Patrol and some of its authorities and agents hoping to get his stolen life savings back. The motion was filed with the assistance of consistent civil-forfeiture-justice fighters from the Institute for Justice, and the preceding details were gleaned from it.

The money is hard-earned. Kazazi, now 64 years old, and his family had the (at the time apparent) good fortune to win a visa to enter the U.S. from the State Department in 2005, and has been a citizen since 2010. His wife Lejla has lately been teaching English to immigrants, while Kazazi has worked a series of jobs including busboy, custodian, and parking lot attendant. (He’d been a police officer in Albania himself.)

Customs has chosen to assert that Kazazi’s money is criminal for a grab bag of reasons that don’t necessarily go together and for which they have no proof: “involved in a smuggling/drug trafficking/money laundering operation” or you know, something bad that means they can steal it.

Was Mr. Kazazi guilty of smuggling, drug trafficking, or money laundering? Money can’t commit a crime by itself, one might think, but requires a human accomplice. Lacking any evidence whatever for any such crime on Kazazi’s part, he’s accused or convicted of none of them. Thanks to the sinister legal magic of “civil asset forfeiture,” the feds can just steal the money without proving any crime at all on the owners part.

Except even that evil power, which shouldn’t exist at all, has its procedural limits thanks to the Civil Asset Forfeiture Reform Act of 2000, as Kazazi’s lawsuits argues. According to that law, Customs in order to keep the stolen loot must officially initiate either civil forfeiture or criminal proceedings within 90 days of the complainant demanding an official federal court procedure regarding the property. That deadline, the suit says, expired back in April, but CPB haven’t returned the money. The feds should have no legal recourse but to do that, promptly. But they haven’t, hence the motion filed today.

“pursuant to an administrative search of Mr. Kazazi and his bags, TSA agents discovered artfully concealed U.S. currency. Mr. Kazazi provided inconsistent statements regarding the currency, had no verifiable source of income and possessed evidence of structuring activity,” that is, making cash withdrawals of less than $10,000 to avoid reporting requirements.

[Wesley] Hottot [one of Kazazi’s lawyers] denies that Rustem Kazazi was trying to conceal the cash — he had wrapped it in paper, labeled it and sent it through the scanner in his carry-on bag. The “inconsistent statements” were a result of Kazazi’s poor English language comprehension, Hottot said.

Hottot also noted that the structuring allegation was not included in the seizure notice. “They’ve never mentioned structuring before,” he said. “I think what were really seeing here is some creative Monday-morning quarterbacking by CBP, trying to justify the unjustified.”

the Kazazis saved up their money from jobs they held lawfully in America, and they have 13 years of tax documents and bank statements to prove it. Moreover, the government has never pointed to any evidence of wrongdoing.

“This family’s case, like so many others, shows why civil forfeiture must end,” explained IJ attorney Johanna Talcott. “The Kazazis did nothing wrong and were never charged with a crime, but the government still won’t return their money all these months later. This kind of abuse is far too common because civil forfeiture is an inherently abusive process that will always have disastrous effects on innocent people. Enough is enough.”

CBP also nattered about laws requiring international travelers with sums greater than $10,000 to report them. Kazazi, his lawyers told the Post, knew about those laws and intended to file his legally required forms prior to getting on the Newark flight in which he actually would be leaving the U.S.

He never got the chance. Let’s hope the courts do the right, and legal, thing, demand CPB obey the law and return the stolen money, and give Kazazi a chance to obey the laws regarding disclosure of funds leaving the country by letting him leave the country with his funds.

One year ago, a State Department press event included quite possibly the most epic “deer in the headlights” moment in all of government press briefing history.

During the final press briefing in May of 2017, the State Department put high level official Stuart Jones at the podium to give the daily briefing, and he was asked how the US could call for democracy in Iran while ignoring the fact that one of Washington’s closest Middle East allies is an oppressive autocratic state with an opaque legal system run by strict Islamic sharia courts.

Stuart Jones, who was appointed as U.S. Ambassador to Iraq by former President Barack Obama in 2014 before assuming the title of assistant secretary of state for near eastern affairs in January, took a long, silent pause after an Agence France-Presse reporter asked the official how President Donald Trump could criticize Iran’s democracy, while standing next to Saudi Arabian officials.

Saudi Arabia is an absolute monarchy, where every position of power is appointed by either the king or other members of the Al Saud royal family from which the nation derives its name. Trump recently visited Saudi Arabia, a close ally of the U.S., and took the opportunity to deeply criticize the two nations’ mutual foe, Iran, and its commitment to democracy weeks after it held its presidential election.

Though clearly hilarious and at the same time appropriately awkward, the incident highlighted the fact that mainstream journalists rarely ask the obvious questions that might so easily expose the glaring hypocrisy of US foreign policy and its leaders.

As Wide Asleep in America blog so aptly described: “In lieu of delivering an actual answer, Jones became visibly uncomfortable, signed audibly, stared blindly into nothingness and said nothing for roughly 18 seconds. You could see the squeaky gears laboring to rotate in his head. You hear the faint trickle of urine run down his thigh. You could feel Jones praying to be suddenly whisked away by a dragon-drawn chariot sent to him by the sun god Helios.”

It’s so beautiful and epic we thought it deserved its own anniversary of remembrance.

But on a more serious note, about six months after Stuart Jones’ internal meltdown moment, a leaked State Department memo obtained by Politico spelled out how Washington merely values the concept of human rights insofar as it can be molded toward propaganda ends. The leaked government memo, made public for the first time in December 2017, instructed top State Department leadership that “Allies should be treated differently — and better — than adversaries.”

“For this reason,” the leaked internal State Department memo argued, “we should consider human rights as an important issue in regard to US relations with China, Russia, North Korea, and Iran. And this is not only because of moral concern for practices inside those countries. It is also because pressing those regimes on human rights is one way to impose costs, apply counter-pressure, and regain the initiative from them strategically.”

As the May 2017 Stuart Jones presser demonstrated, this means countries like Saudi Arabia or Qatar will always be let off the hook in spite of — for example — US ally Saudi Arabia executing over 50 people so far this year, half of them related to nonviolent drug charges, according to HRW. Or this might further translate into government officials choosing to look the other way when allies illegally possess or pursue nuclear or other banned weapons.

Politico explained that the memo encourages government leadership, on up to the level of the Secretary of State, “that we should do exactly what Russian and Chinese propaganda says we do — use human rights as a weapon to beat up our adversaries while letting ourselves and our allies off the hook.”

More recently, one year after the incredible and embarrassing State Department scene, the Council on Foreign Relations (CFR) has delivered an even more astounding propaganda fail which went largely unnoticed in the media. The CFR is among America’s oldest and most establishment think tanks, with a who’s who of government insiders filling up its ranks, and has often played an advisory role on important policy questions to elected officials.

At a Council on Foreign Relations forum about “fake news,” former Editor at Time Magazine Richard Stengel directly states that he supports the use of propaganda on American citizens – then shuts the session down when challenged about how propaganda is used against the third world pic.twitter.com/ClAT5POv7G

Basically, every country creates their own narrative story and, you know, my old job at the State Department was what people used to joke as the ‘chief propagandist’ job. We haven’t talked about propaganda… I’m not against propaganda. Every country does it, and they have to do it to their own population, and I don’t necessarily think it’s that awful.

The Atlantic Council’s Digital Forensic Research Lab today announced a partnership with Facebook to independently monitor disinformation and other vulnerabilities in elections around the world. The effort is part of an initiative to help provide credible research about the role of social media in elections, as well as democracy more generally.

The Digital Forensic Research Lab is launching a partnership with Facebook to support the world’s largest community in its efforts to strengthen democracy…

Though it currently receives little commentary or attention, it must be recalled that Obama administration lifted the prohibition on domestic propaganda in 2013.

Disturbingly, we are probably only just now experiencing the beginning phase of what the State Department and intelligence agencies’ propaganda planners had in mind when the domestic propaganda ban was overturned but these few short years ago.

Today, more now than ever, we are barraged with economic data of which most is lost on the average person. One data point, however, that everyone understands is the price of oil as it directly impacts the average American where it counts the most, in the “wallet.”

The price of oil is plastered just about everywhere from a litany of daily articles to Government policies, the Internet and, ultimately, at every gas station you drive by. Oil prices affect us every day in more ways than just what we are paying for a gallon of gasoline. It affects the cost of just about everything we wear, consume, or utilize, from hard products to services due to rising input costs, fuel surcharges, etc.

This is one reason when the government reports the consumer price index (CPI), and then strips out food and energy to report the core inflation index, it almost always elicits a negative response. Back in 2011, then Fed President William Dudley got a street-corner education in the cost of living when he tried to sell the Fed’s monetary policy to “average Americans.” Dudley tried to explain that while some commodity prices are rising, other prices are falling.

“Today you can buy an iPad2 that costs the same as an iPad 1 that is twice as powerful, you have to look at the prices of all things.”

What he is addressing here is called “hedonics”. Antony P. Mueller wrote a great piece on the “Illusions Of Hedonics” stating that:

“The Bureau of Labor Statistics (BLS) applies “hedonics” when calculating the price indices and for the computation of the real gross domestic product and of productivity. The idea behind hedonics is to incorporate quality changes into prices. This way, a product may be on the market at a higher price, but when the product qualities have augmented more than the price in the eyes of the BLS, it will calculate that the price of this product has actually fallen.

Applying the hedonic technique to a host of goods and services means that even when prices were generally rising, but product improvement are deemed to be larger than the price increases, the calculated inflation rate will fall. With a lower inflation rate, the transformation of nominal gross domestic product (GDP) into real GDP will render a higher result. Likewise, given a constant labor input, productivity will increase. Hedonics opens the door to producing magical results: a lower inflation rate with generally rising prices, a higher growth rate although the economy may be weaker, and a higher productivity number, although productivity would have been declining without the hedonic imputations.”

It is important to understand this concept as it is why Bill Dudley was immediately lambasted by reporters in the audience following his iPad statement with;

“I can’t eat an iPad” and “When was the last time YOU went to a grocery store?”

The reason the “average American” can’t grasp things like “hedonic” adjustments to the inflation index, or even the idea of stripping out volatile food and energy components of CPI to get a core index, is because they live in a world where their daily lives are affixed to the disposable personal income they bring home. The average American gets a paycheck and then must pay not only for rent, utilities, and health insurance, but also food and gas. In their mind why should you exclude the two items that are currently consuming roughly one-fifth of their wages and salaries?

While there has been a lot of pandering from the talking heads about rising oil prices, but what is more important to note is how these price increases in oil “feel” to the average American. The thing that the Fed and most economists miss, in my opinion, is that the average “American” is dealing with a lot of rising cost pressures that aren’t necessarily included in the inflation calculation. Furthermore, while prices of things like oil, commodities, college costs, insurance, healthcare, etc. have been rising; disposable personal incomes have grown at a much slower rates as shown below.

But even that measure of disposable personal incomes in deceiving because the top 20% of wage earners overly skew the data versus the bottom 80%. For the bottom 80% of income earners, disposable incomes are actually more disappointing.

Therefore, even small price increases have a more dramatic effect on the limited amount of disposable personal incomes available to the consumers in the bottom 80%. For many individuals today, the effects of the “financial crisis” have yet to fade as they are still unable to meet the required costs for their standard of living.

United Way has done a study on a group of Americans they call ALICE: Asset Limited, Income Constrained, Employed. The study found that this group does not make the money needed “to survive in the modern economy.” Between families living below the poverty line due to unemployment or disability, and ALICE, the study discovered that 43% of Americans were struggling to cover basic necessities like rent and food.

But even for those who are making ends meet, they aren’t saving either. Northwestern Mutual’s 2018 Planning & Progress Study, which surveyed 2,003 adults, found that 21% of Americans have nothing saved at all for their golden years, and a third of Americans have less than $5,000. To put that into perspective, it means that 31% of U.S. adults could last only a few months on their savings if they had to retire tomorrow.

That data supports the chart below which shows the gap between the inflation-adjusted median standard-of-living versus the disposable income and credit required to pay for it. Beginning in 2007, even after all the disposable income had been spent and credit cards maxed out, there is a growing deficit (currently over $7000) to support the living standard. This is why more individuals than ever are working multiple jobs, not retiring, or just curtailing spending.

Only So Much To Go Around

Of course, when the consumer is under pressure at home, they eventually must reduce consumption. The chart below shows inflation-adjusted oil prices as compared to inflation-adjusted disposable personal income and oil prices. Since oil prices are a direct input cost to so many different aspects of the daily lives of the average “American,” price spikes in oil have a very real impact on the way that consumers “feel” about their ability to make ends meet.

What we find is that when oil prices spike there is an immediate shock to the disposable personal incomes for individuals. For example, during the Iran crisis oil peaked at $109 per barrel, but for consumers it “felt” like $242 a barrel. Then at the peak of the oil market in 2008, when oil traded for $138 a barrel, it felt much closer to $258 as real disposable incomes had declined. Today, as oil trades around $71 a barrel, consumers “feel” like it is closer to $90.

This psychological “cost pressure” obviously impacts the way that consumers behave with their money. While the government tries to massage the differences in inflationary pressures to suppress adjustments to Social Security and Medicare; the average American is rapidly coming to grips with reality.

At some point the process of kicking the can down the road will meet its inevitable conclusion in this game of chicken as consumers continue to leverage themselves to extremes and neglect to save in order to support their standard of living. The evidence is clear that Keynesian economics is a failure, not just recently, but over the last 40-years as increased monetary supply, and lower interest rates, have led to declining wages, savings and the dollar which in turn induced malinvestment.

The declines in income, which have been covered up by increased household leverage as shown above, leaves little true disposable income with which to absorb higher costs from health care, energy, rent and food costs.

At some point, the Fed may well witness another type of deflation, but this time it won’t be just falling prices. Rather, it will be from the masses struggling to maintain a shrinking standard of living as the change shrinks from “Let Them Eat iPads” to just “Eat This!”